The moment when the funds from a loan or credit are made available to the borrower. This date sets the beginning of the period in which the borrower can access and use the funds in accordance with the terms and conditions of the credit agreement.
Individual, company or entity that has received a loan or credit from a financial institution or creditor and, as a result, has the duty to repay the amount borrowed in accordance with the terms and conditions set out in the credit agreement. The debtor undertakes responsibility for making regular payments, which usually include interest, over the period of the loan, until the total amount is repaid in full.
This occurs when a borrower (debtor) fails to fulfil the payment duties set out in a credit or loan agreement. This means that the debtor does not make the payments due, either through delay, default or failure to fulfil other terms of the agreement. Default can vary in severity, from temporary delays in payments to total inability to pay the debt. The consequences of default can include penalties, additional fees, interest on arrears and, in more serious cases, legal action by the creditor to recover the amount owed.
An additional interest rate that is applied when a debtor fails to fulfil the payment obligations of a loan or other debt within the period agreed in the agreement. This late payment interest rate is a penalty for late payment and is intended to compensate the creditor for the costs and losses associated with failure to fulfil payment duties on time.
Interest that accrues over a set period of time and is paid at the end of that period or on agreed payment dates. This is the most common way of calculating interest on mortgages, personal loans, car finance and other types of long-term loans, where the monthly payments include part of the principal amount and part of the interest accrued during the previous month.